P&O Ferries boss on £325,000 per year to pay replacement crew below UK minimum wage

The new seafarers will be on £5.50 an hour as the ferry company scrambles to cut its costs

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P&O Ferries have confessed they will be paying most of their new seafarers, below the UK’s national minimum wage in a bid to half its operating costs under a new model.

Chief executive, Peter Hebblethwaite admitted to the Commons today that the average hourly pay of the new crew is only £5.50.

P&O sacked 800 of their workers last week and immediately replaced them with foreign employees from an agency.

Mr Hebblethwaite, whose basic annual salary is £325,000, insisted to the Commons’ transport and business select committees that the pay is allowed under international maritime rules.

In the session, the CEO also admitted the firm broke the law with their mass firing as the staff weren’t consulted because “no union could accept our proposals”.

Peter Hebblethwaite, Chief Executive, P&O Ferries
Peter Hebblethwaite, Chief Executive, P&O Ferries

He said in the hearing: “There’s absolutely no doubt we were required to consult with the unions.”

MP Andy McDonald interjected: “You chose to break the law?... You can’t just absent yourself from the legal framework of the UK?”

Mr Hebblethwaite said: “It was our assessment that the change was of such magnitude that no union could accept our proposals.”

He continued: “I completely throw our hands up, my hands up, that we did choose not to consult.

Three P&O Ferries boats docked
Three P&O Ferries boats docked

“We did not believe there was any other way to do this.”

The chief executive went on to claim that Transport Secretary Grant Shapps knew about the intention to cut jobs in November last year although that was strongly denied by the Department for Transport (DfT).

In response to being asked if he would make the same decision again with the benefit of hindsight, Mr Hebblethwaite said: “We weren’t viable before, and I know that if we hadn’t made radical changes the business would have closed.”

Andrew Burns QC, barrister at Devereaux Chambers, told MPs “all employers with ships must give a notice to the appropriate authority 45 days before dismissal”.

He continued: “My understanding from what I’ve been told this morning is that the notice was given to the appropriate authorities in the countries where the ships are flagged only on the day of the dismissals and not in advance.”

That “appears to be a breach” of employment law, and “it may be that (P&O Ferries) are liable to a prosecution”, he said.